Ministry of Defence

Royal Navy Operations

Earl Howe: My hon. Friend the Minister of State for the Armed Forces (Penny Mordaunt) has made the following Written Ministerial Statement: On 15 April 2015, while in the Irish Sea, the Fishing Vessel KAREN sustained damage to her nets and deck equipment and, following repairs, resumed fishing shortly after. On the information available at the time, the Royal Navy (RN) was confident that no UK submarine was involved in the incident, and I also informed the House in response to questions from the hon. Member for South Down (Mrs Ritchie) on 10 June 2015 (question 1312) and during Defence oral questions on 13 July 2015 (Official Report, column 579). I now wish to inform the House that, on the basis of new information that has become available, the RN has now confirmed that a UK submarine was, in fact, responsible for snagging the KAREN's nets. The incident, the delay in identifying and addressing the events on that day, and their consequences, are deeply regretted. It is standing Ministry of Defence (MOD) policy not to comment in detail on submarine operations but, exceptionally, I can say that this incident occurred because the submarine did not correctly identify the KAREN as a fishing vessel with nets in the water, and thus did not give her the berth she would otherwise have had. Moreover, had the submarine been aware of the incident at the time, which it was not, then the protocols in place under the "Code of Practice for submarine operations in the vicinity of fishing vessels" would have required the submarine to surface and remain on scene while the matter was investigated. Notwithstanding the enduring requirement to operate RN submarines in busy coastal waters to guarantee our national security, this is the first incident between an RN submarine and a fishing vessel since the Code was introduced in 1993. Having identified the specific circumstances, the RN has already taken steps to further reduce the risk of such circumstances happening again: the instructions issued to submarine Commanding Officers (COs) have been updated to reflect the lessons learned, which will also inform the training given to future COs. The RN's reporting procedures have been reviewed to enable it to confirm more quickly whether or not a UK submarine was involved. These new arrangements will enable the Ministry of Defence's established claims procedures to be invoked with minimal delay and the matter fully investigated. MOD officials have contacted the KAREN's owners and insurers to discuss appropriate compensation. I can assure the House that we take the safety of fishing vessels, and of life at sea, very seriously. The RN is co-operating with the Marine Accident Investigation Board's independent inquiry, and will continue to engage with the UK's fishing communities to explain our position and how we are responding. We will continue to work closely with the Fishing Industry Safety Group and Trade Associations to ensure the continuing safety of fishing vessels and our ships and submarines.

Department for Transport

Advanced Biofuels Demonstration Competition

Lord Ahmad of Wimbledon: My Honourable Friend, the Parliamentary Under Secretary of State for Transport (Andrew Turner), has made the following Ministerial Statement:The Department for Transport launched the £25m Advanced Biofuels Demonstration Competition to support the development of a domestic advanced biofuel industry in December 2014. Following a strong competition, I am pleased to announce that three projects have been selected for investment totalling £25 million over three years. Grants are to be awarded to three winning projects:   Celtic Renewables Limited £10,925,000 Advanced Plasma Power Limited £10,958,194 Nova Pangaea Limited £ 3,000,000   The projects will use the capital grants awarded, supported by significant private sector investment, to construct three demonstration-scale advanced biofuel plants in Swindon, Tees Valley and Grangemouth.   Relative to first-generation biofuels (those made from traditional crops, starch, sugars or vegetable oil), advanced fuels have the potential to deliver greater carbon savings without the same concerns around food security and land use change. The advanced fuel technologies the winning projects will demonstrate could reduce our reliance on imported energy, by turning unwanted waste products into valuable transport fuel, adding value to the UK economy and creating jobs. According to an independent feasibility study, gains from the domestic supply as a result of converting low value waste to high value transport fuel could be worth up to £130 million Gross Value Added (GVA) to the UK by 2030, and potentially up to £500m per year including exports. This is a major step forward for the UK and supports the work the Department for Transport is doing to set the UK’s long term strategy for biofuels in order to meet EU targets, which includes considering a sub target for advanced biofuels. 


This statement has also been made in the House of Commons: 
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Department for Environment, Food and Rural Affairs

Government contingent financial support package for the Thames Tideway Tunnel

Lord Gardiner of Kimble: My Hon Friend the Parliamentary under Secretary of State (Rory Stewart) has today made the following statement.I wish to update the house on progress on the Thames Tideway Tunnel since the Written Ministerial Statement—5 June 2014, Official Report, column 11WS—made by my rt. hon. Friend the member for North Shropshire (Owen Paterson).The Thames Tideway Tunnel is an example of world leading British engineering at its best. It will boost economic growth across the capital, generate thousands of jobs and bring significant benefits to the natural environment by protecting the Thames from sewage. In the 21st century, the most dynamic city in the world should not have a river that is polluted by sewage every time there is heavy rainfall.In the previous statement the Government confirmed it had required Thames Water to put the project out to tender by running a competitive procurement for an Infrastructure Provider that would be separate from Thames Water and would be responsible for delivering the project, including its financing.The procurement was carried out under the Utilities Contracts Regulations 2006. The Government and Ofwat were consulted throughout this process. On 14 July 2015 Thames Water announced that the consortium forming Bazalgette Tunnel Limited was its preferred bidder for the project’s Infrastructure Provider. The shareholders are a consortium of pension funds and long-term investors represented by Allianz, Amber Infrastructure (representing International Public Partnerships and Swiss Life), Dalmore Capital and DIF.On 12 August the European Commission announced that it was content that the State Aid contained in the Government Support Package was compatible with the European Union’s internal market. The adopted decision is expected to be published in the Official Journal of the European Union in due course.On 14 August Ofwat announced that it had designated Bazalgette Tunnel Limited as the Infrastructure Provider under the Water Industry (Specified Infrastructure Projects) (English Undertakers) Regulations 2013.On 24 August Ofwat awarded Bazalgette Tunnel Limited a Project Licence and commercial close was reached on the project. The Project Licence award followed two public consultations carried out by Ofwat in October 2014 and August 2015. Bazalgette Tunnel Limited also signed the project documentation and the three main construction contracts with three consortia who will construct the tunnel.In addition, Bazalgette Tunnel Limited and the Secretary of State for Environment, Food and Rural Affairs, with other project parties, have entered into contracts constituting the Government’s contingent financial support for the project (the “Government Support Package”) and other associated documents. The Government Support Package has enabled the project to attract private sector finance at an acceptable cost for customers and will only be called upon if certain low-probability but high-impact risks arise during construction. If they do not materialise there will be no exposure for the taxpayer.The Secretary of State, Bazalgette Tunnel Limited and Thames Water also signed the Liaison Agreement. This enables Government to monitor progress on the project and will assist with managing any likely calls on the Government Support Package.I am placing the core contracts today in the library of both Houses, subject to some commercial redactions. I understand that other contracts relating to the project will be made available in due course by the parties involved.The competitions for both the Infrastructure Provider and the construction contracts were highly competitive. The winning bid for the Infrastructure Provider offered a Weighted Average Cost of Capital (WACC) of 2.497%, which is fixed, subject to the terms of the Project Licence, until the first Price Review following construction. The construction procurements delivered a target build cost which is unchanged from that estimated in 2011. As a result, Thames Water now estimates the project will lead to an average household customer bill impact which will peak at £20 to £25 by the mid-2020s (in 2015 prices), of which £7 is already included within customer bills. They also expect that their current average household bill for water and wastewater services will remain at the same level, before inflation, until at least 2020. This impact is considerably lower than the maximum estimate of £70 to £80 given in the written ministerial statement—3 November 2011, Official Report, column 41WS—made by my hon. Friend the Member for Newbury (Richard Benyon). This is a significant and welcome reduction in the estimated bill impacts of the project.From the first periodic Price Review following construction of the tunnel prices will be regulated by Ofwat as they are for the remainder of the industry.Construction on the main drive sites is anticipated to start in late summer 2016 with physical completion scheduled for 2023.Many parties have invested a great deal of time and effort to reach this significant milestone. Government looks forward to continuing to work closely with Bazalgette Tunnel Limited, Thames Water and Ofwat so that it can manage the taxpayer risks that arise from the Government Support Package during the construction period and help ensure a successful outcome for customers, taxpayers and the environment.  


This statement has also been made in the House of Commons: 
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